Based on an understanding that the crises of core nations are being transferred to developing countries and thus globalized, two perspectives are highlighted here: first, the development trap most developing countries are caught in due to “cost transfer” by advanced countries can be attributed to the negative externalities of having lost part of their resources and economic sovereignty in the transaction with their former suzerains for gaining “legitimate” independence; second, the currency-strategy of political dominance by the super power in contemporary financial capitalism is different from traditional geo-strategy in the age of industrial capitalism. In the framework of global competition among nation-states, the currency-hegemony triangle is taking shape, which is pivoted on the currency-hegemony of the dominant financial country. We further elaborate the International Competition Smiling Curve to illustrate how manufacturing countries bear the international institutional costs of global financialization.

These theoretical innovations can help to elaborate the cause of the predicament developing countries are facing nowadays.

Based on an understanding that the crises of core nations are being transferred to developing countries and thus globalized, two perspectives are highlighted here: first, the development trap most developing countries are caught in due to “cost transfer” by advanced countries can be attributed to the negative externalities of having lost part of their resources and economic sovereignty in the transaction with their former suzerains for gaining “legitimate” independence; second, the currency-strategy of political dominance by the super power in contemporary financial capitalism is different from traditional geo-strategy in the age of industrial capitalism. In the framework of global competition among nation-states, the currency-hegemony triangle is taking shape, which is pivoted on the currency-hegemony of the dominant financial country. We further elaborate the International Competition Smiling Curve to illustrate how manufacturing countries bear the international institutional costs of global financialization.

These theoretical innovations can help to elaborate the cause of the predicament developing countries are facing nowadays.